Federal beer waste regulations could have cost NH brewers millions

Smuttynose Brewing Co.'s new brewhouse on Towle Farm Road in Hampton features new equipment imported from Germany. (COURTESY)

Proposed federal regulations that threw a multimillion dollar scare into New Hampshire's growing brewing industry appear to be on the verge of being scuttled by the federal Food and Drug Administration.

Brewers get rid of grain left over in the brewing process by selling it or giving it to farmers with dairy cows and beef cattle. The FDA is proposing new food safety rules for animal grains and would have included the spent brewing grains in those rules.

Critics said the FDA was pushing the concept that "good enough for humans is not good enough for a cow" into federal regulations.

Bill Herlicka of White Birch Brewing Co., of Hooksett, president of the Granite State Brewers Association, said the proposal would put millions of dollars worth of grain out of the reach of farmers and resulted in hundreds of thousands of dollars in added expense for brewers to get rid of the waste from the brewing process.

"This practice of donating spent brewers' grains has been going on for the past 20-plus years with no ill health effects reported by farmers or consumers," Herlicka said.

The result of the federal tinkering, brewers claimed, would have been higher costs for grain disposal, which would trickle down to consumer prices. A big casualty would be the foods which define casual American cuisine — cheese, burgers, beer and ice-cream.

Bovine diets would suffer as well.

"The grains are malted and then boiled with water to draw off the sugar and that is what is fermented," said Chris Thorne, a vice president with the Beer Institute, an industry trade association. "The spent grain is a very nutritional and highly valued seed product ... the grains have all the fibers, essential oils and proteins that you want to feed to your animals."

The industry response has the feds waving a white flag.

Michael Taylor, the FDA's deputy commissioner for Foods and Veterinary Medicine, said the agency heard worried brewers from New Hampshire and elsewhere complain that the requirements would increase the cost of doing business but would not improve food safety.

"That, of course, would not make common sense," Taylor said in an official blog posting this week. "We're not going to do it."

New Hampshire brewers, who were battling the proposed rule through trade associations, say it's the right decision.

"This outcome accentuates the importance of self-advocacy and calm, clear communication," said J.T. Thompson, a spokesman for Smuttynose Brewing of Hampton.

Thompson said advocacy in Washington by New Hampshire's U.S. Senators, Kelly Ayotte and Jeanne Shaheen, helped change the course of bureaucratic regulation. "We appreciate their willingness to correct (the rule) so that we can keep working with our farmers and feeding cows."

The rule-making was initiated last October under the influence of the federal Food Safety Modernization Act, a law signed by President Obama in January 2011. The law, the first change in food safety laws since 1938, was touted as shifting the focus of FDA enforcement from responding to incidents of food contamination to preventing them.

New Hampshire's small breweries stress the quality of their products, which are often more expensive to make than those sold by national brewers. Competition would have meant a competitive disadvantage.

Many of New Hampshire's wide assortment of micro- and nano-breweries often just donate the grain to farms, saving the expense of storing or shipping it elsewhere. Typically, it is loaded in a trailer or storage container, and the farmers come and haul it away.

Herlicka and other brewers were initially worried that their choices would come down to drying and packaging spent grain or hiring commercial haulers to dispose of it. Both that would have been expensive because brewing plants are not set up to package grain, and rubbish haulers receive hefty cartage and tipping fees.

Chris Thorne, a vice president with the Brewing Institute, an industry trade group, said the actual proposed rule included no requirement for drying and packaging, but would add millions in additional costs, depending on how much grain a company uses.

Making beer takes a lot of grain.

Thompson said each of the 1,000 batches of beer Smuttynose brewed last year used 2,500 to 3,000 pounds of dry grain.

"At the very least, we'd have to find a place to put all that," Thompson said. "That's a lot to deal with — that's a couple of tractor-trailer loads a week."

Right now, much of the spent grain from Smuttynose ends up at a Chichester farm that raises beef cattle. A single farmer handles whatever the brewery can provide.

Smuttynose recently moved into a new facility in Hampton that was designed to push spent grain into trailers that the farmers hauled away. If the government had gone forward with the new rules, it would have been disruptive as well as expensive.

"We'd either need (a huge) compost pile or to make arrangements to dump hundreds of thousands, if not millions of pounds of spent grain, into landfills," Thompson said. "It's a waste."

The National Craft Brewers Association, which represents 2,000 brewers that make products in relatively small batches, said the FDA was trying to solve a problem that doesn't exists.

Putnam, the FDA spokeswoman, said the agency will have new draft regulations out by summer.

"We anticipated some of these issues when we requested comment on the proposed rule and are already reviewing the extensive input received from brewers and others," Putnam said. "We are confident we will find a common-sense solution."

Beer brewing has been a growth business in New Hampshire, and now ranges from the huge Anheuser-Busch brewery in Merrimack to corner nano-brewers that have turned beer-making back into a mom-and-pop business, all of which would be hit by the added costs, and none of which is quite understood why.

"I was at a craft brewers conference in Denver, and this was a big topic of conversation," Thompson said. "I never heard anyone say 'There was that one time where a whole boatload of cattle died' — cows are designed to digest complex fiber like that; that's what cows are designed to consume."